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S.C. State Ports Authority discusses dip in cargo volumes

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By Liz Segrist
lsegrist@scbiznews.com
Published Feb. 18, 2016

Slower volumes at the Port of Charleston led the S.C. State Ports Authority board to discuss whether the trend stems from a traditional seasonal cargo dip or a global economic slowdown.

About 633,000 pier containers have come through port terminals in fiscal 2016 from July to January, up about 3% from the same time last year.

Roughly 82,000 of those pier containers came through the port in January — meaning cargo volumes were down about 7.5% from the same time last year.

“This is the seventh month in a row now we’ve seen a decrease,” said ports authority board member Kurt Grindstaff, also the CFO of DBH Global Inc. in Hilton Head Island, during a board meeting Wednesday.

January and February are usually slower months for port cargo volumes with March through June trending stronger, President and CEO Jim Newsome said. He said February gate moves so far point to increasing volumes.

“We are in a very seasonal business. ...I think it’s a blip,” Newsome said. “I think January and February will be modest and March through June, similar to last year, should be relatively strong.”

Newsome pointed to the record month of May 2015, which saw 104,000 pier containers come through the Port of Charleston, as an example of the cargo upswing that usually occurs in the spring.

“The question is: Will May of this year be as strong as May of last year? ... Trade is slower now. We see that in global container trade in 2015. All the container ports in the world grew 1%,” Newsome said. “I think we’ll see a trend back up in the next couple of months and hopefully March will be significantly stronger.”

Board members Grindstaff and Richard Stanley, the vice president and CTO at GE Power and Water in Greenville, questioned how the maritime agency would cut costs if the volumes were a result of a downturn.

Newsome said the agency would freeze hiring and leave any retirement or turnover positions open. It would also study external expenses, including work or consulting contracts with other companies, as well as business trips.

“We would have a plan for that, but I don’t think that’s going to be the case. ... Everything from A to Z would get reviewed, and I like to think we do that anyway,” Newsome said.

Grindstaff and Stanley urged ports authority staff and board members to examine cost cutting measures now.

“Our view is that the economy is worse than what you read in the paper, so we’re looking at everything right now,” Stanley said, referring to his company. “I want to have eyes wide open that if this is truly not seasonal, we know what levers we’re going to start pulling.”

Ports authority board chairman Patrick McKinney, a longtime real estate professional and developer, said the agency should know in about three months whether volumes are trending flat or growing.

For fiscal 2016 to date, the ports authority handled 1.12 million 20-foot equivalent units, up 4.6% from the year prior. TEUs are the common industry measurement that counts every 20 feet worth of container.

Around 122,000 passengers have come through the port and 1,100 ships have docked in fiscal 2016 so far.

The authority reported $21 million in earnings for fiscal 2016, up 26% from the same time last year. Operating revenues were $121 million and total expenses were $99 million through Jan. 31.

Reach staff writer Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.

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